New Issue: Realty Income prices $1.3 billion three-tranche offering of new and reopened notes

By Cristal Cody

Tupelo, Miss., Nov. 29 – Realty Income Corp. priced $1.3 billion of notes (A3/BBB+/BBB+) in three tranches on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $550 million of new 3.65% 10-year notes at 99.778 to yield 3.676% and a Treasuries plus 130 basis points spread.

Realty Income priced a $500 million reopening of its 3.25% notes due Oct. 15, 2022 at 101.773 to yield 2.837%, or a spread of 75 bps over Treasuries.

The company originally sold $450 million of the notes on Oct. 2, 2012 at 99.382 to yield 3.323% and a Treasuries plus 170 bps spread. The total outstanding is $950 million.

The company also priced a $250 million tap of its 4.65% notes due March 15, 2047 at 105.434 to yield 4.318%. The bonds priced with a spread of Treasuries plus 150 bps.

The company originally sold $250 million of the 4.65% notes on March 8, 2017 at 99.968 to yield 4.652%, or 150 bps over Treasuries spread. The total outstanding now is $500 million.

Citigroup Global Markets Inc., Barclays, BNY Mellon Capital Markets LLC, Goldman Sachs & Co., UBS Securities LLC, U.S. Bancorp Investments, Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Regions Securities LLC and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used to redeem $550 million of outstanding 6.75% notes due Aug. 15, 2019, to repay borrowings outstanding under the company's $2 billion revolving credit facility and for other general corporate purposes.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

Issuer:	Realty Income Corp.
Amount:	$1.3 billion
Description:	Notes
Bookrunners:	Citigroup Global Markets Inc., Barclays, BNY Mellon Capital Markets LLC, Goldman Sachs & Co., UBS Securities LLC, U.S. Bancorp Investments, Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Regions Securities LLC and Wells Fargo Securities, LLC
Co-lead managers:	BB&T Capital Markets, Jefferies, MUFG and Stifel, Nicolaus & Co., Inc.
Senior co-managers:	Comerica Securities, Inc., Raymond James & Associates, Inc. and Samuel A. Ramirez & Co., Inc.
Co-managers:	Academy Securities, Inc., Evercore Group LLC and Moelis & Co. LLC
Trade date:	Nov. 29
Settlement date:	Dec. 6
Ratings:	Moody’s: A3
	S&P: BBB+
	Fitch: BBB+
Distribution:	SEC registered
10-year notes
Amount:	$550 million
Maturity:	Jan. 15, 2028
Coupon:	3.65%
Price:	99.778
Yield:	3.676%
Spread:	Treasuries plus 130 bps
Call features:	Make-whole call at greater of par and Treasuries plus 20 bps before Oct. 15, 2027; thereafter at par
Notes due 2022
Amount:	$500 million reopening
Maturity:	Oct. 15, 2022
Coupon:	3.25%
Price:	101.773
Yield:	2.837%
Spread:	Treasuries plus 75 bps
Call features:	Make-whole call at greater of par and Treasuries plus 30 bps before July 15, 2022; thereafter at par
Total outstanding:	$950 million, including $450 million of notes priced Oct. 2, 2012 at 99.382 to yield 3.323%, or Treasuries plus 170 bps
Notes due 2047
Amount:	$250 million reopening
Maturity:	March 15, 2047
Coupon:	4.65%
Price:	105.434
Yield:	4.318%
Spread:	Treasuries plus 150 bps
Call features:	Make-whole call at greater of par and Treasuries plus 25 bps before Sept. 15, 2046; thereafter at par
Total outstanding:	$500 million, including $250 million of notes priced March 8, 2017 at 99.968 to yield 4.652%, or 150 bps over Treasuries

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